Guest Writer: Ashli Answers the Top 3 Personal Finance Questions for Business Owners
I’m super excited to introduce my friend Ashli Brooke, a brilliant business coach and financial mentor, as a guest writer for the blog! Ashli and I first met at a retreat earlier this year and reconnected this summer. Let me tell you—she is a fountain of information when it comes to finances, and her wisdom is something every business owner needs to hear.
When I reached out to Ashli to see if she would share some of her expertise here, I was beyond delighted when she said yes! Today, she’s answering the Top 3 Personal Finance Questions that every business owner should know.
So, grab your favorite drink, get comfortable, and be ready to learn some amazing financial insights from Ashli!
Top 3 Personal Finance Questions for Business Owners: Answered
By Ashli Brooke
About the Author
Ashli Brooke is a seasoned business coach, financial mentor, and currently a fiduciary registered independent advisor. She is dedicated to empowering women to take control of their finances and achieve their dreams. With over a decade of experience as a licensed financial professional and business coach, Ashli has helped countless clients grow their businesses, eliminate debt, and build substantial legacies.
Her journey began at just 11 years old, when her entrepreneurial spirit led her to save thousands of dollars from odd jobs and playground candy sales. This early financial acumen, coupled with the guidance of her businesswoman mother, set the foundation for Ashli’s future success. She went on to launch and successfully sell her own cosmetics company before focusing on her true passion: coaching and mentoring fellow business owners and women on their paths to success.
As a fiduciary registered independent advisor, Ashli is legally and ethically bound to act in her clients’ best interests, providing unbiased financial advice and strategies. Her mission is to help women of all ages, life stages, and net worth levels become financially fearless. Her approach combines practical financial advice with empowering strategies, helping women turn their wildest dreams into reality. As a self-made millionaire by age 30, Ashli brings both expertise and personal experience to her coaching, making her uniquely qualified to address the financial concerns of business owners.
Top 3 Personal Finance Questions for Business Owners: Answered
As a business owner, managing your personal finances alongside your business finances can be challenging. Here are answers to three of the most common personal finance questions that business owners ask:
- How to Separate Personal and Business Finances?
Separating personal and business finances is crucial for legal protection, easier accounting, and clearer financial management. Here are some key steps:
- Open a separate business bank account: This should be your first step. Use this account for all business-related transactions.
- Get a business credit card: Use it exclusively for business expenses to keep them separate from personal spending.
- Pay yourself a salary: Instead of dipping into business funds as needed, set up a regular salary for yourself.
- Keep meticulous records: Track all business income and expenses separately from personal ones.
- Establish your business as a separate legal entity: Consider forming an LLC or corporation to create a clear separation between you and your business.
Why is this separation important?
Keeping your business and personal finances separate creates a clear audit trail, simplifies tax preparation, and helps maintain the legal distinction between you and your business. It can protect your personal assets from business liabilities, build your business credit, and provide a more accurate picture of your business’s financial health. This separation is also crucial for tax compliance and can be invaluable if your business ever faces legal issues or an audit.
- What Retirement Planning Strategies Work Best for Small Business Owners?
As a business owner, you’re responsible for your own retirement planning. Here are some effective strategies:
- Solo 401(k): If you’re self-employed with no employees, this allows for high contribution limits.
- SEP IRA: Simple to set up and allows you to contribute up to 25% of your income.
- SIMPLE IRA: Good for businesses with up to 100 employees, allowing both employer and employee contributions.
- Diversify your investments: Don’t put all your eggs in one basket – your business. Invest in a mix of stocks, bonds, and other assets.
- Consider hiring a financial advisor: They can help you create a comprehensive retirement strategy tailored to your unique situation.
Why are these strategies important?
As a business owner, you don’t have the luxury of an employer-sponsored 401(k) or pension plan. These strategies allow you to take control of your retirement planning, often with higher contribution limits than traditional IRAs. They can provide tax advantages, helping you reduce your current tax burden while saving for the future. Diversification is crucial because your business is already a significant investment; spreading your retirement savings across different asset classes can help manage risk. A financial advisor can provide expertise in navigating the complex landscape of retirement planning for business owners.
- How to Optimize Tax Strategies as a Business Owner?
Effective tax planning can significantly impact your bottom line. Here are some strategies to consider:
- Choose the right business structure: Different structures (sole proprietorship, LLC, S-Corp) have different tax implications.
- Maximize deductions: Keep track of all business expenses, including home office, vehicle use, and health insurance premiums.
- Timing of income and expenses: Consider deferring income or accelerating expenses at year-end to manage your tax bracket.
- Contribute to tax-advantaged retirement accounts: Contributions can often be deducted from your taxable income.
- Hire family members: This can be a tax-efficient way to keep money in the family and potentially reduce your overall tax burden.
- Stay informed about tax law changes: Tax laws frequently change, so stay updated or work with a tax professional.
Why are these tax strategies crucial?
Optimizing your tax strategy can have a significant impact on your business’s profitability and your personal wealth. The right business structure can provide liability protection and potentially lower your tax burden. Maximizing deductions directly reduces your taxable income, keeping more money in your pocket. Strategic timing of income and expenses can help manage your tax bracket, potentially reducing your overall tax liability. Tax-advantaged retirement accounts offer a double benefit: reducing current taxable income while saving for the future. Staying informed about tax law changes ensures you’re taking advantage of all available benefits and avoiding potential penalties.
Remember, while these strategies can be effective, it’s always best to consult with financial and tax professionals for advice tailored to your specific situation. They can help you navigate the complexities of personal finance as a business owner and develop a plan that works best for you and your business.
You can learn more about Ashli by visiting her website at https://ashlibrooke.com, https://www.kingsview.com/advisor/ashli-newcomb/
LYDIA GILLIS is Denver based Personal Branding Photographer, Retreat Host, Educator, Marketing Strategist. She helps entrepreneurs elevate their personal brand and grow a profitable and sustainable business.
To see personal branding photos click here.
VISIT OUR WEBSITE | “LIKE” US ON FACEBOOK | FOLLOW US ON INSTAGRAM | FOLLOW US ON PINTEREST | FOLLOW US ON TWITT
